Is Crowdsourcing the Next Big Component of Supply Chain Logistics?

News of crowdsourcing initiatives in supply chain logistics is increasingly frequent, and with good reason: crowdsourcing expands a supply chain’s ability to deliver on or ahead of time, increases redundancy, and enhances customer satisfaction.

In a recent discussion of high-profile crowdsourcing innovations, details of the successes of Amazon and rival Google are articulated: guaranteed two-day delivery, leveraging a wide scattering of distribution centers and an independent delivery fleet for Amazon, the tapping of local businesses for same-day service for Google.

Why is this important? Because Amazon leads the world in supply chain successes that have altered consumer consciousness. Expectations of supply chain delivery, efficiency and accuracy have been almost universally transformed by Amazon’s successful model. The answer, for smaller enterprises wishing to meet such a high standard? Crowdsourcing – signing up just about any potential logistics partner on wheels, up to and including taxi companies.

Uber-X is a good example: the San Francisco-based transportation networking pioneer has brought the concept of the taxi into the twenty-first century, coordinating vehicles for hire in the US and other countries by means of a convenient smart phone app. That network (and others, including Lyft) are available as a potential crowdsourced delivery fleet for any supply chain with the desire to leverage it. And with Uber’s stated goal of deploying driverless vehicles as soon as the technology is proven, such a network would one day be competitive with Amazon’s drone delivery program.

Certification, insurance, and maintenance checks become a concern, but they would be, anyway. The importance of the trend is that very high standards of performance in product delivery are rapidly becoming universal – making those standards a priority for any supply chain, with crowdsourcing an increasingly worthy option for consideration.

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2015 Upgrade Priorities for B2B Integration

As the new year gets underway, what are the top priorities for enhancing existing B2B integration resources?

Several new technologies and methodologies are on that list of priorities, but three stand out: the event-driven gateway, Managed File Transfer, and Predictive Analytics.

The event-driven gateway is an advanced gateway model that naturally supercedes more traditional gateways. A typical B2B gateway passes information in files, routing by way of its metadata, according to a fixed workflow. The event-driven gateway is more sophisticated, with a workflow that is responsive to properties of actual logistics data and events in logistics that set tasks in motion beyond conventional workflow. Such gateways are highly robust, fault-tolerant, and improve efficiency at critical points in integrated processes.

Predictive analytics, now an industry buzzword, are becoming an indispensable competitive feature in B2B integrated processes. The interdependence of supply chain partners in leveraging analytics to anticipate fluctuations in consumer demand, logistical opportunity, and supply chain disruption increasingly require not just capability, but dexterity in the use of predictive analytics.

Managed File Transfer is likewise becoming indispensable in the sharing of data between supply chain partners as well as internally, between disparate in-house systems. MFT provides essential features of data management that conventional FTP does not, including detection of transfer failures, built-in authentication, a wide range of encryption/security options, and accommodation of multiple protocols.

Rapid evolution of supply chain methodology and marketplace performance are mandating a philosophy of perpetual upgrade in both systems and practices.

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How Does Modern B2B Infrastructure Evolve?

In a presentation on how B2B infrastructure is currently evolving, Chandana Gopal, Research Manager for IDC Research, identified three gateway classes now supported in the marketplace.

The first is the basic gateway, which Gopel characterized as a gateway that leaves files unopened, routing them based on their metadata. Such a gateway is friendly to integration with Managed File Transfer, and improves the quality of automation overall.

The second is the application-ready gateway, which can internally process semi-structured data (EDI, etc.) and enables data quality ownership entirely within the system. Such a gateway is capable of end-to-end processing of files, with improved visibility and fewer touchpoints, yielding greatly increased automation and less introduction of error.

Finally, Gopel defined the advanced gateway, which includes support of data streams for predictive analytics and the integration of trading data for predictive business initiatives. Partners with such gateways are sufficiently automated to participate in trading networks.

Gopel made the point that these three gateway classes represent a smooth progression for growth within the enterprise, adopting with the basic gateway and advancing, through uptake of increasingly advanced software and methodology, through the other two classes in as little as three to five years.

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Growing Traffic Makes Control of File Transfer Essential

The transfer of unstructured data (files) between business partners is growing at a brisk pace. This opens the door for potential error, compliance issues, and confusion.

According to a recent study by the Aberdeen Group, the number of end users requiring file transfer capability is growing rapidly, between 6% and 9% annually, as of 2013. The volume of file transfers per user is growing faster still, from 8% to 11% annually. Finally, the size of the average file to be transferred is also growing, from 6% to 7%.

The flip side is that IT staff to accommodate the increased traffic is not growing correspondingly.

A sensible solution for B2B partner companies needing to accommodate these increases is Managed File Transfer. MTF augments existing B2B data exchange mechanisms by off-loading the transfer of larger files to an independent mechanism, lessening resource consumption. It automates file transfers between B2B partners, incorporating detection and handling of transfer failures, which conventional file transfer does not; and it can authenticate users against AD/LDAP.

Industry uptake of MTF has been rapid, and it has taken up a permanent place in the B2B toolkit.

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